FOR DISCUSSION PURPOSES ONLY

TERM SHEET FOR COMMON TERMS AGREEMENT

SLEP POWER PROJECT - REPUBLIC OF CARMEN1
This Term Sheet together with its cover letter constitutes a binding offer by the Lenders
to provide financing on the terms set forth herein, but is not meant to be an exhaustive document
and will be replaced and superceded by definitive documentation. This Summary of Terms and
Conditions together with its cover letter replaces all previous understandings and agreements,
written or oral with respect to the Common Terms Agreement.
Borrower:

San Luis Energy Partners (SLEP), a consortium

consisting of Universal Electric (Universal), the Alta
Group
(Alta),
Constructores
de
Carmen
(Constructores or Contractor) and General Generators
(GG, and, together with Universal, Alta and
Constructores, the Sponsors).

Project:

The construction, operation and maintenance of (the

Project), in Phase I (Phase I) a nominal 500MW heavy
fuel-fired simple-cycle power generation facility (capable
of operating on natural gas), and, in Phase II (Phase II),
of a nominal 700MW gas-fired combined-cycle power
facility (integrating the Phase I facility, and capable of
operating on heavy fuel), together with ancillary plant and
equipment (collectively, at any time, the Plant), located
at a site owned by Corporacin de la Electricidad de
Carmen (CDEC) in SLEP, Carmen (the Site) and
related The Project will be owned by SLEP and operated on
behalf of SLEP by the Operator.

Arrangers:

__________________, (the Arranger) together with any

co-Arrangers which may be appointed from time to time
pursuant to and in accordance with the terms of the
commitment letter (the Commitment Letter) to which
this Term Sheet (the Term Sheet) is attached.

Lenders:

The Lenders may be comprised of:

This term sheet addresses the terms of the project financing and includes the terms common to
all Lenders in the project. The term sheet for the Financing Agreement will contain additional
terms specific to a Lender in the Project. This draft contains a number of Lender- favorable
provisions, and should not be viewed as a fully-negotiated term sheet reflecting current market
terms.
N-TS Common Terms.doc

(i)

The Arranger, and/or a syndicate of financial

institutions as may be formed by the Arranger after
consultation with, and reasonably acceptable to,
SLEP including Carmen local banks;

(ii)

any co-Arrangers which may be appointed from

time to time pursuant to and in accordance with the
terms of the Commitment Letter; and

(iii)

any Export Credit Agencies and/or Multilateral

Lending Institutions (each as defined below), in
their capacity as a lender of record as opposed to
being a provider of political risk and/or commercial
risk coverage.

Export Credit Agencies:

Exportkreditnamnden, and such other export credit

agencies as may be identified by the Arrangers in
connection with the supply of the Works.

Multilateral Lending Agencies:

International Finance Corporation, the Private Sector

Department of the Inter-American Development Bank and
the Overseas Investment Corporation or other similar
institutions including commercial banks to the extent
providing financing pursuant to co-financing programs of
such institutions.

Term Loan Facility:

A multiple drawdown, senior secured term loan facility as

more particularly described in this Term Sheet, to fund
payments by SLEP described under Use of Proceeds
during the Availability Period (defined below).
The Term Loan Facility may be divided into separate
tranches for the purpose of facilitating participation by
Export Credit Agencies and Multilateral Lending Agencies.
The allocation of the Term Loan Facility into one or more
Tranches (for example, Tranche A and Tranche B)
will be at the discretion of the Arrangers and may be varied
from time to time for such purpose. By way of example,
Advances under Tranche A may, pursuant to and in
accordance with the terms of the Facility Agreements, be
made to finance those payments by SLEP described under
Use of Proceeds which are eligible for Export Credit
Agency financing and/or risk insurance coverage from the
relevant Export Credit Agencies (whether or not any such
Export Credit Agencies are in fact providing such
coverage). Advances under Tranche B may, pursuant to
and in accordance with the terms of the Facility

N-TS Common Terms.doc

Agreements, be made to finance those payments made by

SLEP described under Use of Proceeds other than those
financed under Tranches A referred to above.
Administrative Agent:

An Administrative Agent shall be appointed by the

Arrangers. Reasonable fees for such agent shall be paid by
SLEP.

Collateral Agent:

A Collateral Agent shall be appointed by the Arrangers.

Reasonable fees for such agent shall be paid by SLEP.

Construction Contract; Supply Contracts:

SLEP has entered into a contract for the
design, engineering, procurement and fabrication of a
power generation facility in two phases (the EPC
Contract) and existing contracts for the purchase of
certain components (the Supply Contracts) with inter
alia, the Contractor, GG and other entities referred to
therein, collectively, for the works set forth therein (the
Works). Variations to the EPC Contract and to the
Supply Contracts that exceed ___% of the total cost of such
contract shall be subject to the prior approval of the
Lenders.
Other Supply Contracts:

Any other material contracts for supply of additional works

for the Project entered into at any time with other suppliers
(the Other Supply Contracts) shall (i) contain provisions
reasonably comparable to the Supply Contracts, as
applicable; and (ii) be in accordance with and as
contemplated in the Business Plan, (as defined herein), or
as may otherwise be agreed with the Lenders). Any
financing arrangements that may be entered into by SLEP
in relation to such supply contracts shall meet the
requirements for Permitted Indebtedness hereunder and
shall not (without the prior written consent of the Lenders)
thereby result in a breach of any of the terms of the
Financing Agreements.

Facility Amount:

Subject to the Arrangers' satisfactory Due Diligence (as

referred to in the Commitment Letter to which this is
attached), the facility shall be for an amount equivalent to
US $___million [$750M less the amount of equity
contributions expected], of which $_____million shall be
allocated in respect of Phase I and $_____ million shall be
allocated in respect of Phase II.

Common Terms Agreement:

The Common Terms Agreement to be entered into by the

Lenders and SLEP in accordance with this Term Sheet

N-TS Common Terms.doc

setting forth certain common terms and conditions

applicable to the Term Loan Facility and the facilities to be
provided by certain Other Secured Creditors (as hereinafter
defined).
Facility Agreements:

The agreements to be entered into with the Lenders with

regard to the Term Loan Facility in accordance with this
Term Sheet.

Guarantee:

The Obligations will be guaranteed by all subsidiaries of

SLEP and by _______________.

Available Amounts; Proceeds:

During Phase I, Availability shall be limited to $_______

(the Phase I Available Amount).
During Phase II,
Availability shall be limited to $_________ (the Phase II
Available Amount). Proceeds of the Term Loan Facility
shall be applied to: (A) finance the payments of amounts
that are due and unpaid or that will become due and
payable pursuant to the Supply Contracts, (B) finance
payments under the Construction Contract, and (C) finance
interest payable during the Availability Period in respect of
the Term Loan Facility; (D) finance fees payable to the
Lenders in connection with the financing of the Term Loan
Facility; (E) finance operating costs of SLEP; (F) finance
payments to be made pursuant to Other Supply Contracts
after utilizing the Term Loan Facility to fund those
payments referred to in paragraph (A) and (B).

Non-Recourse:

The Lenders' rights and remedies in the event of SLEP

failure to pay or perform under any Financing Agreements
or Project Document shall be non-recourse to the Sponsors,
[provided however that it is recourse with respect to the
Sponsor's obligations set forth in the Sponsors
Contribution Agreement (defined below). Except with
respect to such obligations under the Sponsors
Contribution Agreement,] the Lenders shall have no claims
against, or recourse to, the officers, directors, agents,
advisors, employees or affiliates of SLEP or any Sponsor,
and the recourse for payment of the Term Loan Facility
shall be limited to the exercise of remedies against SLEP
and enforcement of the Project Security.

Sponsors Contribution Agreement: The sponsors shall, collectively, subscribe to a Sponsors

Contribution Agreement on terms acceptable to the
Lenders, pursuant to which contributions of at least
$________ will be made to SLEP by the Sponsors, for

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Phase I and contributions of at least $________ will be

made in respect of Phase II.
Financial Signing:

The date upon which the Facility Agreements are entered

into by the parties thereto.

Financial Closing:

The date upon which the first drawdown under the Term
Loan Facility occurs in accordance with the terms of the
Facility Agreements which shall occur no later than a date
to be specified in the Facility Agreements.

Final Maturity Date:

_________________, subject to the provisions of the

paragraph entitled Amortization below.

Availability Period:

The Availability Period for the Phase I Available Amounts,

will commence on Financial Signing and ends on the date
which is ___ months after the projected date for final
payments by SLEP under the Supply Contract or the
Construction Agreement (to be specified as a fixed date in
the Financing Agreements), in respect of Phase I but in no
event later than [eighteen months after Financial Closing].
The Availability Period for the Phase II Available Amounts
will commence on the date that all Phase II Conditions
Precedent to Borrowing have been satisfied and ends on the
date which is ___ months after the projected date for final
payments by SLEP under the Supply Contract or
Construction Agreement in respect of Phase II but in no
event later than ______________.

Reduction or Cancellation:

SLEP may at any time, on not less than thirty (30) days'
notice to the Lenders, reduce or cancel the commitments
under the Facility Agreements in a minimum amount of not
less than US $__ million (and in integral multiples of US
$__ million), provided, that (i) after giving effect to any
such reduction or cancellation, the Facility Amount is not
reduced below US$__ million, and (ii) SLEP can
demonstrate to the reasonable satisfaction of the Lenders
that the reduced or canceled portion of the Term Loan
Facility is no longer required by SLEP, including,
demonstrating SLEP ability to continue to perform its
payment obligations under the Project Documents. Any
such reduction or cancellation shall, unless otherwise
agreed by the Lenders, be applied pro rata in respect of any
separate tranches under the Facility Agreements.

Refinancings:

SLEP shall have the right to refinance all or any portion of

the Term Loan Facility upon not less than sixty (60) days'

N-TS Common Terms.doc

prior notice without premium or penalty, subject to

breakage costs (if any); provided, however, that (A) any
such refinancing of the Term Loan Facility shall be applied
ratably as to all tranches and (B) any such partial
refinancing shall (i) not include an interest rate or interest
margin that results in a Material Adverse Effect on SLEPs
ability to pay interest or principal amortization with respect
to the Term Loan Facility, (ii) be either unsecured or
expressly subject to the terms and conditions of the
Common Terms Agreement and other applicable Financing
Agreements, and (iii) be subject to other terms and
conditions to be agreed in the definitive Financing
Agreements.
Cooperation:

SLEP and the Arrangers shall cooperate with each other

with respect to (a) syndication of the Facility (b) preparing
and submitting applications for political and commercial
risk coverage or refinancing any or all of the Export Credit
Agencies, the Multilateral Lending Agencies or any of
them, and (c) with any refinancing or issuance of debt
securities constituting Permitted Indebtedness. SLEP shall
be responsible for paying any Agency insurance premiums
and other fees and costs in connection with such coverage
or refinancing (including the cost of consultants' reports, if
any), required by an Agency.

Voluntary Prepayment:

SLEP may, on not less than _____ days' notice to the

Lenders, prepay the loans disbursed under the Facility
Agreements (the Loans) in whole or in part without
premium or penalty, in a minimum amount of not less than
US $[5] million (and in integral multiples of US $[1]
million), subject to breakage costs (if any), provided that
after giving effect to such prepayment, SLEP will remain in
compliance with the financial covenants set forth in the
Financing Agreements, and any amounts so prepaid may
not be reborrowed. Any such voluntary prepayment shall,
unless otherwise agreed by the Lenders, be applied pro rata
in respect of any separate tranches under the Facility
Agreements.

Mandatory Prepayment:

Mandatory Prepayment of a portion of the Term Loan

Facility will occur upon:
(i)

N-TS Common Terms.doc

a public offering by SLEP of newly issued voting or

non-voting equity, in which case, such net proceeds
shall be applied towards a mandatory prepayment of

the Term Loan Facility, with the balance to be

applied as SLEP may determine;

Permitted Indebtedness:

N-TS Common Terms.doc

(ii)

____% of the net proceeds of any issuance of debt

securities by SLEP constituting Permitted
Indebtedness;

(iii)

the receipt of Excess Cash Flow in a Financial Year,

in which case, [50]% of such Excess Cash Flow
shall be applied towards mandatory prepayment of
the Term Loan Facility;

(iv)

receipt of proceeds of Insurances other than those to

be applied to repair or replace an asset and which
are agreed in the definitive Financing Agreements
to be applied to mandatory prepayment of the Term
Loan Facility; and

(v)

proceeds of any refinancing of the Term Loan

Facility.

SLEP will not incur at any time any indebtedness other

than any of (i) indebtedness incurred under the Facility
Agreements in accordance with the terms thereof or the
refinancing in full thereof; and (ii) other indebtedness
incurred in compliance with the Financial Covenants (as
referred to below) which consists of (A) working capital
facilities in an aggregate amount to be agreed, (B)
indebtedness incurred in connection with the issuance of
debt securities of up to US $___, including any partial
refinancing of the Term Loan Facility in accordance with
the Financing Agreements; provided, that if required by the
Lenders, the lender providing any such refinancing
becomes a party to the Common Terms Agreement,
(C) additional indebtedness incurred to finance or lease the
acquisition of new equipment or assets constituting Capital
Expenditures contemplated in the then current Approved
Business Plan up to [125]% of the value of such equipment
or assets provided always that any lien granted therefor (if
any) is only in respect of the equipment and assets being
financed (Permitted Purchase Money Debt); (D)
unsecured trade credit up to 180 days incurred in the
ordinary course of business, (E) contingent obligations
under or in connection with hedging agreements, letters of
credit, guarantees, and other similar arrangements which

when aggregated with the amounts of other guarantees or

contingent liabilities permitted under the definitive
Financing Agreements would not cause SLEP to be in
default thereunder; and (F) other indebtedness up to an
amount to be agreed in the definitive Financing
Agreements, provided that, in each case, referred to in this
clause (ii) such indebtedness is either unsecured or, if
secured, secured only on the terms as permitted herein
above or such indebtedness (and the corresponding
equipment and services, and any collateral, guarantees and
other credit assurances provided in connection therewith)
shall be subject to and entitled to the benefits of the
Common Terms Agreement and shall have a repayment
schedule not more favorable to the lender than as provided
in the Term Loan Facility.
Amortization:

The Term Loan Facility will be subject to quarterly

amortization of principal with advances to be payable
[relevant repayment schedule to be determined based on
business plan.]

Interest Payment Dates:

Interest with respect to the Term Loan Facility will be paid

in arrears on the last day of each applicable Interest Period
(each an Interest Payment Date). Interest will be
calculated on the basis of actual days elapsed and a 360-day
year.

Interest Periods:

Three or six months applicable to the relevant interest

period as selected by SLEP for the purposes of determining
the relevant rate of interest, [subject in each case to any
approvals of the Carmen Central Bank].

Interest Rates:

As described in the Facility Term Sheets.

Applicable Margin:

As set forth in the Facility Term Sheets.

Default Rate:

While any Event of Default continues after the allowable

cure period and where the Lenders have not yet exercised
their remedies, the Applicable Margin shall increase by
__% per annum from the date of breach.

Interest Rate and/or

Currency Protection:

N-TS Common Terms.doc

SLEP may elect to hedge all or any of its interest rate or

currency exposure under the Term Loan Facility provided,
that such hedging arrangements are in accordance with a
hedging policy to be agreed between SLEP and the
Arrangers.

Disbursements and
Drawdown Schedule:

Currencies of the Term

Loan Facility:

Drawdowns to occur during the Availability Periods,

subject to the satisfaction of Conditions Precedent and in
accordance with the Use of Proceeds set forth herein and in
the Facility Agreements provided, that (i) the minimum
amount of any disbursement shall be set forth in the
definitive Financing Agreements and (ii) amounts in excess
of such minimum shall be integral multiples of an amount
to be set forth in the definitive Financing Agreements or its
equivalent; except for the final disbursement, to the extent
that the remaining unused commitment is less than such
minimum amount.
United States Dollars (US$) only. In connection with
any financing of a Tranche by any Agency or by Carmen
Banks in a currency other than US$, the Tranche shall be
redenominated in such other currency based upon exchange
rates, and other applicable terms, as shall be agreed to by
all parties.

Fees:

Fees payable to each of the Administrative Agent, the

Collateral Agent and the Arrangers are subject to separately
negotiated fee arrangements as set forth in separate fee
letters (the Fee Letters) between each of the
Administrative Agent, Collateral Agent, the respective
Lenders and SLEP.

Financing Agreements:

The Facility Agreements, the Common Terms Agreement,

the Fee Letters, the Intercreditor Agreement, the Security
Documents, the Sponsors Contribution Agreement, and any
other agreements relating to the financing of the Project.

Project Documents:

The agreements among SLEP and third parties, including

the pledge agreements, all material governmental
authorizations (including, without limitation, any
authorizations from the GOC Ministry of Power, the
Authorizations), permits, licenses and franchises issued
in relation to the Project, all material use of infrastructure
agreements, insurance policies expressly required under the
Financing Agreements, the Site lease with CDEC, the
power purchase contract with CDEC, all material supply
contracts including the supply contract with GG,
Construction Contracts and all other material documents
pertaining to the development, construction, maintenance,
ownership and operation of the Project, in each case

N-TS Common Terms.doc

presently existing and entered into hereafter and each in

form and substance satisfactory to the Lenders.
Security Documents:

The documents entered into to secure repayment of all

outstanding principal, and payment of all interest, fees and
other amounts from time to time under the Term Loan
Facility (collectively, the Obligations), including:
1.

Pledge to Collateral Agent (on behalf of Lenders) of

all outstanding equity interests of SLEP and any of
its wholly owned subsidiaries from time to time,
and Powers of Attorney granted by SLEP in favor
of the Collateral Agent on behalf of the Lenders.

2.

Assignment in favor of the Collateral Agent (on

behalf of the Lenders) of all of SLEP interests under
the Material Project Documents (to be defined)
(other than non-material Project Documents to be
agreed).

3.

Pledge to Collateral Agent (on behalf of Lenders) of

certain Material Assets (to be defined), in each case
whether currently owned or subsequently acquired
by SLEP and other assets of SLEP to be agreed.

4.

Undertaking of SLEP to pledge and grant to the

Collateral Agent a continuing security interest in the
Authorizations if and when granting such security
interest is allowed by Carmen law.

5.

Accession Agreements by which all other lenders to

SLEP that are eligible to share in the Project
Security will become party to the Intercreditor
Agreement and security sharing arrangements.

6.

Pledge over the bank accounts (to be identified) of

SLEP into which revenues of the Project and/or the
proceeds of any collateral will be paid or
transferred.

7.

Such other security over the receivables and other

material assets of SLEP as may reasonably and
practicably be provided.

All of the security will be duly registered or filed, as

applicable, with all registries or other governmental entities
in all jurisdictions where such registration or filing is
N-TS Common Terms.doc

10

necessary for the perfection of a first-priority security

interest.
Project Security:

The security for the repayment of the Obligations provided

pursuant to the Security Documents.

Intercreditor Agreement:

The agreement to be entered into among the Lenders (and

any Other Secured Creditor), in form and substance
satisfactory to the Administrative Agent and the Lenders.

Other Secured Creditors:

Creditors secured by the Security Documents other than the

Lenders providing Permitted Indebtedness in the
circumstances contemplated in the definition thereof.

Security Sharing:

The Project Security shall be subject to security sharing

arrangements with the consent of the Lenders which
consent shall not unreasonably be withheld.

Affirmative
Covenants of SLEP:

N-TS Common Terms.doc

SLEP shall make affirmative covenants customary and

usual in a financing of this type, including, without
limitation, the following:
1.

To maintain its corporate existence.

2.

To comply in all material respects with all

applicable laws and regulations (including
applicable environmental laws and regulations);
except to the extent contested in good faith by
appropriate proceedings without thereby incurring
material risk of the imposition of any lien (other
than a Permitted Lien) or the forfeiture or loss of the
Authorizations and, further, for the potential
liability in respect thereof adequate reserves have
been established, and where failure to comply
would not individually or in the aggregate result in
a Material Adverse Effect (as hereafter defined).

3.

To maintain the Authorizations and to obtain and

maintain all other material governmental licenses,
authorizations, consents and permits required in
connection with the construction, operation and
financing of the Project (excluding certain specified
consents set forth on a schedule to the Common
Terms Agreement to the extent that the loss of such
license, authorization, consent or permit does not
have a Material Adverse Effect and SLEP is using
its best efforts to replace, substitute or otherwise
11

make arrangements providing the Project with

equivalent rights or permissions as applicable), and
promptly pay when due all necessary license,
franchise and other fees and charges due and
payable thereunder, provided, that, SLEP shall not
be deemed to be in breach of this covenant or
otherwise be in default as a result of certain
regulatory changes in Carmen which result in
amendments to or substitution of the Authorization;
provided always that SLEP otherwise remains
authorized on and after the date of any such change
to conduct the business as currently contemplated in
the Project Documents and as may then constitute
any part of the Project and any additional power
generation business that may result from such
change and that such change does not have a
Material Adverse Effect.

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4.

To comply in all material respects with all

agreements to which it is a party and by which it is
bound, except to the extent contested in good faith
by appropriate proceedings without thereby
incurring material risk of the imposition of any lien
(other than a Permitted Lien) or the forfeiture or
loss of the Authorizations and, further, for the
potential liability in respect thereof adequate
reserves have been established, or where failure to
comply would not individually or in the aggregate
result in a Material Adverse Effect.

5.

To maintain its books and records consistent with

Carmen generally accepted accounting standards
and with a project of this type.

6.

To provide to the Administrative Agent for the

benefit of the Lenders (in English and in accordance
with Carmen generally accepted accounting
principles, as well as being reconciled to US GAAP
in respect of (i) below):
(i)

quarterly unaudited and annual audited (and

consolidated, if applicable) financial
statements (including balance sheets and
profit and loss statements);

(ii)

US GAAP reconciliations of the financial

statements included in (i) above;

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N-TS Common Terms.doc

(iii)

as soon as practicable each annual operating

budget and other information as agreed
within 90 days of the end of the fiscal year;

(iv)

quarterly covenant compliance certificates

together with, in the case of financial and
operating covenants, back-up calculations or
documentation demonstrating compliance,
as the case may be; and

(v)

such other construction progress reports,

operations reports, financial forecasts
(including cash flow projections) and other
information as required by the Financing
Agreements.

7.

To file all relevant tax returns and pay its taxes

when due, except to the extent contested in good
faith by appropriate proceedings without thereby
incurring material risk of the imposition of any lien
(other than a Permitted Lien) or the forfeiture or
loss of the Authorizations and, further, for the
potential liability in respect thereof adequate
reserves have been established, and where failure to
comply would not individually or in the aggregate
result in a Material Adverse Effect.

8.

To consult with representatives of the Lenders

regarding engineer and progress reports and to
permit representatives of the Lenders, on reasonable
notice to SLEP and during normal business hours,
to visit and inspect all premises and facilities and to
have reasonable access to SLEPs books and
records, accountants and professional advisors.

9.

To enter into and maintain adequate contracts for

the purchase of fuel necessary for the operation of
the Plant.

10.

To utilize the proceeds drawn down under the Term

Loan Facility only as set forth under Use of
Proceeds.

11.

To obtain such consents as the Collateral Agent

shall deem necessary to establish and maintain the
Lenders' first priority lien in the Project Security
(other than any consent required by any regulator in

13

connection with foreclosure on the pledge of equity

of SLEP).

Negative Covenants
of SLEP:

12.

To provide or cause to be provided insurance

coverage.

13.

To notify the Administrative Agent and the

Collateral Agent of:
the occurrence of any matured or unmatured
Event of Default; and

(ii)

any material litigation or proceedings taken

or threatened in writing against it that if
determined adversely to SLEP could
reasonably be expected to have a Material
Adverse Effect.

14.

To comply in all material respects with each Project

Document and Security Document and deliver
copies of any amendments thereto or any additional
Material Project Documents entered into from time
to time.

15.

To preserve and maintain good and valid title to its

properties and assets free and clear of any liens
other than Permitted Liens and, subject to the right
of SLEP effect Permitted Asset Sales, to be defined.

16.

To ensure that the rights of the Lenders against

SLEP under the Financing Agreements will rank at
least pari passu (as to priority of payment) with the
claims of all creditors SLEP (subject to customary
exceptions).

17.

To maintain the Project in accordance with the

Project Documents.

SLEP shall make negative covenants customary and usual

in a financing of this type, including, without limitation, the
following:
1.

N-TS Common Terms.doc

(i)

Not to consent to any security interest in the Project,

other than in favor of the Lenders or as otherwise
expressly permitted under the Financing
Agreements.

14

N-TS Common Terms.doc

2.

Not to declare or make any dividend payments or

other cash distributions, except as required by law
or as otherwise permitted by the Financing
Agreements.

3.

Not to amend, modify, supplement, vary, waive,

terminate, agree to terminate or purport to do any of
the foregoing in relation to any Transaction
Document to which it is a party, other than in
accordance with the terms thereof, except to the
extent that any such amendment, variation, waiver
or termination could not reasonably be expected to
have a Material Adverse Effect.

4.

Not to create any lien other than a Permitted Lien.

Permitted Liens shall consist of: (i) liens created
pursuant to the Security Documents; (ii) liens in
favor of parties providing Permitted Indebtedness to
the extent permitted by the terms of the definition
thereof; (iii) liens for taxes, assessments or
governmental charges or levies not yet due and
payable or liens for taxes, assessments or
governmental charges or levies being contested in
good faith and by appropriate proceedings for
which adequate reserves have been established and
which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to
such lien; (iv) liens in respect of property or assets
of SLEP arising by operation of law, which were
incurred in the ordinary course of business and do
not secure indebtedness for borrowed money, such
as carriers', warehousemen's, materialmen's and
mechanics' liens and other similar liens arising in
the ordinary course of business which in each and
every such circumstance (x) do not in the aggregate
materially detract from the value of the property or
assets of SLEP and do not materially impair the use
thereof in the operation of the business of SLEP or
(y) are being contested in good faith by appropriate
proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or
asset subject to such lien; (v) easements, rights-ofway, restrictions (including zoning restrictions),
encroachments, protrusions and other similar
charges or encumbrances, and minor title
deficiencies, in each case whether now or hereafter
in existence, not securing indebtedness and not
15

materially interfering with the conduct of the

business of SLEP; (vi) liens arising out of
judgments or awards in respect of which SLEP shall
in good faith be prosecuting an appeal or
proceedings for review in respect of which there
shall have been secured a subsisting stay of
execution pending such appeal or proceedings, and
which proceedings have the effect of preventing the
forfeiture or sale of the property or asset subject to
such lien, provided that the aggregate amount of
any cash and the fair market value of any property
subject to such liens shall not exceed an amount to
be agreed; (vii) statutory and common law
landlords' liens under leases or subleases to which
SLEP is a party; (viii) pledges or deposits to secure
obligations under workers' compensation or
unemployment insurance laws or similar legislation
or to secure public or statutory obligations or good
faith deposits in connection with bids, tenders,
contracts or leases; (ix) any interest or title of a
lessor, sublessor, licensee or licensor under any
lease or license agreement permitted by the
Financing Agreements or Project Documents; and
(x) other liens securing obligations not constituting
indebtedness for borrowed money customarily
permitted in financings of this nature and to be
agreed in definitive Financing Agreements.

N-TS Common Terms.doc

5.

Not to enter into any merger, acquisition or

consolidation at any time before a date agreed and
thereafter not to do so unless (a) no Event of
Default or Potential Event of Default (to be defined
in the Financing Agreements) exists either prior to
or following the conclusion of any such merger,
acquisition or consolidation, (b) satisfactory legal
opinions, as reasonably required by the Lenders,
have been obtained in relation to the obligations of
SLEP under the Financing Agreements and the
Lenders' continuing lien on the Project Security and
(c) such merger, acquisition or consolidation does
not result in the breach of any covenant contained in
any Financing Agreement.

6.

Other than Permitted Asset Sales to be defined in

the definitive Financing Agreements, not to convey,
transfer, lease or otherwise dispose of all or a
substantial part of its assets.
16

N-TS Common Terms.doc

7.

Not to amend, modify, supplement, vary, waive,

terminate, or agree to terminate or purport to do any
of the foregoing in relation to, any of the Project
Documents to which it is a party; unless such
amendment, modification, supplement, variation,
waiver or termination could not reasonably be
expected to have a Material Adverse Effect or with
other exceptions to be agreed.

8.

subject to exceptions to be agreed, not to issue

additional equity.

9.

Not to incur any indebtedness other than Permitted

Indebtedness.

10.

Not to purchase, redeem or reduce its equity capital,

or amend or waive any provision of its constitutive
documents except as permitted under the terms of
the Financing Agreements.

11.

Not to make any loans, advances (other than in the

ordinary course of business or in connection with
distributions to Sponsors to be agreed) or purchase
or acquire any shares or other ownership interest in,
any other entity other than Permitted Investments
(to be defined as agreed).

12.

Not to enter into any transaction with any affiliate

of SLEP, other than in the ordinary course of
business and on terms and conditions substantially
as favorable to SLEP as would reasonably be
obtained in a comparable arm's length transaction,
except for loans from affiliates, employment
arrangements and other mutually agreeable
exceptions.

13.

Not to engage in any business other than with

respect to the development, ownership, and/or
operation of power generation facilities.

14.

Not to make any change in reporting practices

except as may be required or permitted by Carmen
GAAP.

15.

Not to prepay any other facilities which are subject

to the Common Terms Agreement, at any time
unless a corresponding pro rata prepayment is

17

made in respect of the Term Loan Facility at such

time.
16.

Not to establish any subsidiaries of SLEP unless

security in form and substance satisfactory to the
Lenders is provided in favor of the Lenders over all
equity of any such subsidiary held by SLEP; and
provided always that the creation of any such
subsidiary shall not cause SLEP fail to comply with
any covenant and shall not result in a Material
Adverse Effect (it being understood in such instance
that all covenants herein shall apply to each such
subsidiary on the same basis as to SLEP).

Financial Covenants:
At all times during the Term Loan Facility, SLEP shall
comply with the following financial covenants:

Conditions Precedent to
Financial Signing:

(i)

Debt Service Coverage Ratio - A ratio of Cash

Flow Available for Debt Service to Debt Service of
no less than __ : 1.00. Such incurrence test shall be
on a projected basis, for each quarter until final
maturity of the Term Loan Facility.

(ii)

Long Term Debt:Equity - A ratio of Long Term

Debt to Equity of not more than ___:___.

(iii)

Capital Expenditures - Annual Capital

Expenditures not to exceed ___% of amounts in
Business Plan, plus further amounts funded for such
express purpose from equity or from Permitted
Debt.

(iv)

Minimum EBITDA Maintain minimum

EBITDA, measured in US$ of not less than a
schedule to be agreed.

The Common Terms Agreement shall include conditions

precedent to Financial Signing usual and customary in a
financing of this type, including without limitation, the
following:
1.

N-TS Common Terms.doc

Receipt of a business plan (including financial

plans, projections and deployment schedules) from
SLEP, which business plan (the Business Plan)
shall be satisfactory to the Arrangers;

18

2.

Evidence reasonably acceptable to the Arrangers

that all necessary licenses and approvals including
the Authorizations, necessary at the time have been
obtained by SLEP.

It shall also be a condition precedent to Financial Signing

that all [of the Lenders] shall be a party to the Common
Terms Agreement for the purposes of providing a term loan
facility to SLEP, in form and substance satisfactory to the
Arrangers) in an amount equal to US $_____ million.
Conditions Precedent to
Financial Closing of Initial
Drawdown:

N-TS Common Terms.doc

The Common Terms Agreement shall include conditions

precedent to Financial Closing of the Initial Drawdown
usual and customary in a financing of this type, and such
other documents and evidence as may be reasonably
requested by the Lenders, including without limitation, the
following:
1.

Receipt of customary and appropriate legal opinions

from SLEP New York and Carmen counsel,
subject to customary exceptions.

2.

Execution and delivery of the Financing

Agreements and Material Project Documents (to be
agreed), receipt by SLEP of all material
governmental authorizations, permits and licenses
(including, without limitation, any required
authorization of the Central Bank of Carmen in
connection with the Term Loan Facility) and
insurance package (to the extent that such are then
contemplated to be in existence) and confirmation
that same are in full force and effect and there is no
material default thereunder by SLEP.

3.

Perfection and registration of the pledge of equity of

SLEP and all other security established in favor of
the Collateral Agent (on behalf of the Lenders)
under the Security Documents.

4.

Receipt of: (i) certified copies of the articles of

association of SLEP and any amendments thereto;
and (ii) certified copies of authorizing resolutions of
the Board of SLEP.

19

N-TS Common Terms.doc

5.

Receipt of a letter from each relevant process agent

for SLEP accepting its designation as such.

6.

No Material Adverse Change in the business,

condition (financial or otherwise), operations,
performance, properties or prospects of SLEP or the
Project. No material adverse change since the date
of each Sponsor's audited financial statements for
the fiscal year ending December 31, 2003 in the
business, condition (financial or otherwise),
operations or properties of such Sponsor, which
change could reasonably be expected to have a
material adverse effect on the ability of such
Sponsor to make its respective contribution
pursuant to the Sponsors Contribution Agreement.

7.

No material adverse change since the date of

Financial Signing in loan syndication or
international debt capital market conditions (as to
indebtedness of borrowers from Carmen and
elsewhere in Latin America) that could reasonably
be expected to have a material adverse effect on
syndication of the Term Loan Facility by the
Arrangers.

8.

No moratorium by the federal government (or any

agency or instrumentality thereof) of Carmen on the
payment of its external debt and no other action
taken by the federal government (or any agency or
instrumentality thereof) of Carmen that would
prevent or delay the repayment by SLEP of amounts
to be disbursed under the Facility Agreements and
other loan documents in accordance with the terms
thereof.

9.

Receipt of a copy, certified as true and complete by

the Borrower, of each of the Insurances which are to
include evidence that the interest of the Collateral
Trustee is noted thereon and that the Collateral
Trustee is named as a loss payee (subject to, unless
and Event of Default shall have occurred and be
continuing, payments in respect of loss or damage
not exceeding an agreed threshold to be made direct
to SLEP) together with such brokers' letters of
undertaking and other certificates as the InterCreditor Agent may require.

20

Conditions Precedent to
Each Drawdown:

N-TS Common Terms.doc

10.

Receipt of most recent audited financial statements

of SLEP (if available) as well as the most recent
audited annual financial statements of the Sponsors.

11.

Payment of all fees and expenses then due and

payable to the Lenders under the Financing
Agreements other than those payable out of the
proceeds of the Initial Drawdown.

12.

Receipt of the Business Plan, forecasts and updates

or revisions thereof, reports of the Project Engineer,
construction schedules, budgets, all forecasts,
operating reports and construction progress reports
and any other reports then required under the
Financing Agreements.

13.

Receipt of any additional documentation required

by mandates of any Export Credit Agencies and/or
Multilateral Lending Institutions as described in the
Financing Agreements.

14.

Evidence of compliance with environmental

mandates of each Lender that is an Export Credit
Agency and/or Multilateral Lending Institution and
environmental assessments shall have been
provided.

15.

Compliance with conditions precedent to the initial

drawdown contained in the Facility Agreements.

The Common Terms Agreement shall include conditions

precedent to each drawdown, including the Initial
Drawdown, usual and customary in a financing of this type,
and such other documents and evidence as may be
reasonably requested by the Lenders, including without
limitation, the following:
1.

Execution of documentation appropriate for

drawdowns, such as disbursement requests and
disbursement confirmations.

2.

Existence of no Event of Default or Potential Event

of Default (to be defined in the Financing
Agreements).

3.

Representations and warranties shall be true and

correct in all material respects as of the date of such
21

drawdown and after giving effect thereto, except to

the extent that such representations and warranties
expressly relate to an earlier date, in which case
such representations and warranties shall be true
and correct in all material respects as of such earlier
date.

N-TS Common Terms.doc

4.

Funding Contributions required to have been

contributed to SLEP by each Sponsor on or prior to
the date of any such drawdown shall have been
made as required by the terms of such Sponsors
Contribution Agreement together with evidence that
any Funding Contributions in the form of debt shall
have been subordinated in right of payment to the
Term Loan Facility.

5.

The Project Engineer has delivered a certificate

confirming the construction of the Works is
proceeding in accordance with the most recent
forecast, budget and operating report and in the
absence of such confirmation because of any
deviation from the build-out schedule that such
deviation could not reasonably be expected to delay
the agreed build-out and operation of the Project,
(the Agreed Build-Out to be further agreed) by a
date to be agreed beyond the date to be specified in
the Common Terms Agreement for such Agreed
Build-Out in any manner which may reasonably be
expected to have a Material Adverse Effect on the
Project.

6.

No Material Adverse Change shall have occurred

when compared to the Relevant Business Condition
and be continuing as at the date of the relevant
Notice of Drawdown in relation to SLEP or, from
the date of audited financial statements for the fiscal
year ending December 31, 2003 in relation to any
Sponsor, to the extent such Sponsor continues to
have any obligations under the Sponsors
Contribution Agreement or any Material Project
Document.

7.

No moratorium by the federal government (or any

agency or instrumentality thereof) of Carmen on the
payment of its external debt and no other action
taken by the federal government (or any agency or
instrumentality thereof) of Carmen that would

22

prevent the repayment by SLEP of amounts to be

disbursed under the Facility Agreements and other
loan documents in accordance with the terms
thereof.
8.

The Construction Contract and Supply Contracts

remain in full force and effect in accordance with
their terms, and there is no default thereunder.

9.

All fees and expenses and other charges payable

under the Financing Documents shall have been
paid.

10.

Compliance with a maximum Long Term Debt to

Equity Ratio (to be defined).

1.

Evidence reasonably acceptable to the Arrangers

that all necessary licenses and approvals necessary
at the time for the construction and operation of the
Transmission Pipeline through Colombia and
Panama shall be been obtained.

2.

The business plan, projections, budget and

operating reports for Phase II have been delivered
and is acceptable to the [Required Lenders].

Conditions Precedent to
Initial Phase II Drawdown:

Representations and
Warranties:

N-TS Common Terms.doc

On Financial Signing, Financial Closing and each

drawdown thereafter, SLEP will be required to make
representations and warranties usual and customary in a
financing of this type, including without limitation, the
following (provided that to the extent that such
representations and warranties expressly relate to an earlier
date, such representations and warranties shall be true and
correct in all material respects as of such earlier date):
1.

due organization, existence and power of SLEP to

conduct its business;

2.

that each of SLEP and each Sponsor has taken all

corporate and other action required for the due
execution and performance of the Financing
Agreements and all Project Documents to which it
is a party and that each of the Financing
Agreements and Project Documents has been duly

23

executed and delivered by SLEP and the Sponsors,

as the case may be;

N-TS Common Terms.doc

3.

SLEP compliance (including payment of material

fees or charges, if any) with all material laws,
regulations and permits (including applicable laws,
regulations and permits relating to environmental
standards and controls), except to the extent that
any non-compliance therewith could not reasonably
be expected to have a Material Adverse Effect in
relation to SLEP or the Project;

4.

absence of pending or, to the best of SLEP

knowledge, threatened litigation that could
reasonably be expected to have a Material Adverse
Effect;

5.

absence of any continuing breach or default under

any Material Project Document or material
Financing Agreement, except as may otherwise be
agreed in the Financing Agreements;

6.

that the Project is in compliance with the most

recently provided construction schedules and
budgets for the Project, except where such noncompliance could not reasonably be expected to
have a Material Adverse Effect;

7.

SLEP financial statements, prepared in accordance

with accounting principles generally accepted in
[Carmen], truly and fairly reflect the financial
position of SLEP as of the dates of such financial
statements;

8.

that the rights of the Lenders against SLEP under

the Financing Agreements rank and will rank at
least pari passu (as to priority of payment) with the
claims of all creditors of SLEP except to the extent
such claims are preferred solely by any bankruptcy,
insolvency, liquidation or other similar laws of
general application;;

9.

that the Security Documents confer the liens with

the priority purported to be created thereby over the
Project Security and such Project Security is not
subject to any prior security interests (other than
Permitted Liens) and subject, to regulatory

24

approvals that may be necessary due to a change of

control resulting from any foreclosure thereunder;

N-TS Common Terms.doc

10.

confirmation that all tax returns have been filed and

tax payments made other than those (i) being
contested in good faith by appropriate proceedings
without thereby incurring material risk of the
imposition of any lien (other than a Permitted Lien
(to be defined), or the forfeiture or loss of the
Authorizations and, further, for the potential
liability in respect thereof adequate reserves are
maintained with respect thereto or (ii) the
nonpayment of which would not have a Material
Adverse Effect;

11.

that the obligations of SLEP under the Financing

Agreements and Project Documents are legal, valid
and binding obligations enforceable in accordance
with their terms, subject to normal legal
qualifications;

12.

that SLEP is (i) in compliance in all material

respects with its respective obligations relating to
all employee benefit plans established, maintained
or contributed to by it, as required by law or
otherwise, and (ii) does not have outstanding any
liabilities with respect to any such employee benefit
plans which could reasonably be expected to have a
Material Adverse Effect;

13.

that no strike, slowdown or stoppage is pending or,

to the best of SLEP knowledge, threatened, against
SLEP or the Project that could reasonably be
expected to have a Material Adverse Effect;

14.

that SLEP or Constructores in its name or in the

name of SLEP has obtained all government
registrations, approvals and licenses necessary at
the time such representation is made to perform its
obligations under Material Project Documents and
the Financing Agreements and has made all
payments then required to have been made with
respect thereto, except for (i) any failure to so
obtain any such registration, approval or license or
failure to make such payment which could not
reasonably be expected to result in a Material
Adverse Effect, and (ii) certain consents of third

25

parties not within the control of SLEP as agreed

with the Lenders and set forth on a schedule to the
Common Terms Agreement (including any consents
necessary for Phase II once the Phase II Availability
Period has commenced).

Events of Default:

N-TS Common Terms.doc

15.

that the execution of the Financing Agreements by

SLEP does not, and performance of its obligations
thereunder will not, contravene or result in any
breach of (i) its constitutive documents, (ii) any
material agreement to which it is party or (iii) any
law, ordinance, rule, regulation or requirement
applicable to SLEP.

16.

that SLEP will not be entitled to claim immunity

from suit or other legal process.

17.

No material Adverse Change shall have occurred

when compared to the Relevant Business Condition
and be continuing in relation to SLEP or, from the
date of its audited financial statements for the fiscal
year ending December 31, 2003 in relation to any
Sponsor, to the extent that such Sponsor continues
to have obligations under the Sponsors Contribution
Agreement or any Material Project Document.

The Common Terms Agreement shall include Events of

Default usual and customary in a financing of this type,
including, without limitation, the following:
1.

Failure to pay interest, principal or fees under any

Credit Facility when due, and such failure (in the
case of interest or fees) is not cured within five (5)
business days.

2.

Any representation or warranty by SLEP under any

Finance Document proves to have been untrue in
any material respect when given, remains material
at the time in question, and if capable of remedy
shall remain unremedied for more than thirty (30)
days from the date SLEP has knowledge that such
representation or warranty was untrue in such
material respect.

3.

Bankruptcy, insolvency, winding-up (whether by

way of voluntary arrangement or otherwise),
liquidation, dissolution or similar proceedings, etc.,

26

of any of SLEP or any of its subsidiaries from time

to time and the Sponsors except, as to the Sponsors
(i) that such event occurs after a date to be agreed
and such Sponsor's contribution required under the
Sponsors Contribution Agreement has been fully
performed, and (ii) to the extent that the Lenders are
reasonably satisfied that any such bankruptcy,
insolvency, etc., will not, or cannot reasonably be
expected to, result in the inability of SLEP to
perform its obligations under the Material Project
Documents and the Financing Agreements.

N-TS Common Terms.doc

4.

Any Material Project Document or any Financing

Agreement shall be declared by a competent court
or any governmental authority in a final, nonapplicable ruling or determination to be null and
void or unenforceable or SLEP, shall allege the
same or repudiate any such documents.

5.

Failure to comply with certain of the covenants (to

be agreed) contained in the Financing Agreements.

6.

Failure to comply with any of (i) SLEP or the

Sponsors' obligations under the Financing
Agreements (other than as referred to in 5 above),
or (ii) SLEP obligations under the Project
Agreements, which the Lenders reasonably
determine to be material and, if the same is capable
of remedy, remaining unremedied for more than
thirty (30) days from the date SLEP has knowledge
of same.

7.

Entry of a final, non-appealable judgment against

SLEP in excess of an amount to be agreed that
remains unstayed or unsatisfied for sixty (60) or
more consecutive days.

8.

Cross-defaults resulting from failure to pay, or any

other event permitting the acceleration of payment
of, other indebtedness of SLEP, subject to specified
minimums.

9.

Government action in the nature of condemnation,

nationalization, seizure, or expropriation of all or
substantially all of the property or other assets of
SLEP.

27

10.

Abandonment by SLEP of the Project or suspension

of or delay by SLEP for any reason in the
construction or the operation of the Project (other
than for breach by the GG, which breach is not
remedied within one-hundred and fifty (150) days)
or for a force majeure event and such abandonment
or suspension continues for more than one-hundred
and fifty (150) consecutive days.

11.

SLEP fails to achieve the Agreed Build-out by a

date or dates to be agreed.

12.

Failure of the Sponsors, collectively, to (i) control,

directly or indirectly, at least fifty-one percent
(51%) of the equity of SLEP (measured both by
economic interest and voting power) or (ii) maintain
their ownership interests in SLEP in accordance
with any regulatory requirements of the Republic of
Carmen or any agency or political subdivision
thereof, until __________________.

13.

A Material Adverse Change shall have occurred and

be continuing.

Remedies:

Any time that an Event of Default shall be continuing, the

Required Lenders (to be defined) shall have the right, on
notice to SLEP, to: (i) suspend the commitments under the
Facility Agreements; (ii) terminate any commitments under
the Facility Agreements; and/or (iii) declare amounts then
outstanding under the Term Loan Facility immediately due
and payable. Enforcement of the Project Security under the
Financing Agreements shall be subject to the provisions of
the Intercreditor Agreement.

Assignment or Syndication:

The Lenders or any of them may assign and/or transfer

their participation, in part or in whole, in the Term Loan
Facility, to any other institutions contemplated as being
Lenders in this Term Sheet at their own cost (subject to
customary provisions limiting SLEP obligations to pay
increased costs incurred by an assignee).

Taxes:

All amounts payable under the Facility Agreements will be

paid free and clear of all present and future taxes, stamp
and other social contributions, like duties, imposts,
applicable transaction taxes, withholdings or other
deductions whatsoever imposed by the government (or any
agency or instrumentality thereof) of Carmen or by any
jurisdiction by or through which payment is made. Should

N-TS Common Terms.doc

28

any such deductions be made, SLEP shall gross-up such

payments, except where otherwise agreed, such that the
Lenders will receive the same payments as if no such
deductions had been applied.
No Set-offs:

All payments by SLEP or the Sponsors under the Financing

Agreements will be made without setoff or counterclaim of
any kind. Without limiting the foregoing, SLEP will not be
entitled to setoff any amount owing by GG under the
Supply Contract or otherwise against any amount payable
by SLEP or the Sponsors under the Financing Agreements.

Cost and Yield Protection:

The Facility Agreements shall contain customary

Eurodollar loan provisions, including alternative interest
rate, the withdrawal of the Lenders in the event of
supervening illegality, increased costs of the Lenders;
subject in each case to customary and reasonable mitigation
obligations on the part of the Lenders concerned.

Governing Law:

Laws of the State of New York shall govern the Facility

Agreements and the Financing Agreements (other than the
Security Documents). Laws of the State of New York and
of Carmen shall govern the other Project Documents and
Security Documents, as relevant.

Jurisdiction:

Non-exclusive jurisdiction of the courts of New York and

Carmen. SLEP and the Sponsors will appoint a process
agent in New York.

Miscellaneous Expenses:

All out-of-pocket expenses and professional fees and

expenses incurred by the Lenders (including, without
limitation, legal and insurance fees, and any other advisory
or consultancy fees agreed upon between the Arrangers and
SLEP) in connection with the negotiation, preparation,
execution and syndication of the Facility Agreements and
each of the other Financing Agreements and in connection
with any enforcement of any rights of the Lenders (or any
agent or trustee on their behalf) in relation thereto shall be
for the account of SLEP.

Material Adverse Effect:

A material adverse effect on (i) the ability of SLEP or any

Sponsor to observe and perform its obligations under the
Financing Agreements or the Project Documents (such
reference to the Project Documents being limited, in the
case of the Sponsors, to the Sponsor Agreements) in
accordance with the terms thereof; or (ii) the business,
properties, prospects, assets, liabilities or financial

N-TS Common Terms.doc

29

condition of SLEP or the Project, (iii) the ability of any

Lender to receive repayment, or of SLEP to repay, amounts
under the Term Loan Facility in U.S. Dollars or (iv) the
legality, validity, binding effect or enforceability of any
Financing Agreements or the rights or remedies of the
Lenders therein described.
Material Adverse Change:

N-TS Common Terms.doc

A Material Adverse Effect which has occurred after the

specified date.

30